Correlation Between Great-west and Vanguard Small-cap

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Great-west and Vanguard Small-cap at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Great-west and Vanguard Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Sp Small and Vanguard Small Cap Index, you can compare the effects of market volatilities on Great-west and Vanguard Small-cap and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Great-west with a short position of Vanguard Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west and Vanguard Small-cap.

Diversification Opportunities for Great-west and Vanguard Small-cap

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Great-west and Vanguard is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding GREAT-WEST SP SMALL and VANGUARD SMALL-CAP INDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small-cap Index and Great-west is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Great West Sp Small are associated (or correlated) with Vanguard Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small-cap Index has no effect on the direction of Great-west i.e., Great-west and Vanguard Small-cap go up and down completely randomly.

Pair Corralation between Great-west and Vanguard Small-cap

Assuming the 90 days horizon Great-west is expected to generate 1.54 times less return on investment than Vanguard Small-cap. In addition to that, Great-west is 1.03 times more volatile than Vanguard Small Cap Index. It trades about 0.03 of its total potential returns per unit of risk. Vanguard Small Cap Index is currently generating about 0.05 per unit of volatility. If you would invest  8,496  in Vanguard Small Cap Index on December 29, 2023 and sell it today you would earn a total of  2,414  from holding Vanguard Small Cap Index or generate 28.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.77%
ValuesDaily Returns

GREAT-WEST SP SMALL  vs.  VANGUARD SMALL-CAP INDEX

 Performance 
       Timeline  
Great-west Sp Small 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Great West Sp Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Great-west is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Vanguard Small-cap Index 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Small Cap Index are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile basic indicators, Vanguard Small-cap may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Great-west and Vanguard Small-cap Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Great-west and Vanguard Small-cap

The main advantage of trading using opposite Great-west and Vanguard Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west position performs unexpectedly, Vanguard Small-cap can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Vanguard Small-cap will offset losses from the drop in Vanguard Small-cap's long position.
The idea behind Great West Sp Small and Vanguard Small Cap Index pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

Other Complementary Tools

Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.